The biggest new series of the season (and one of the biggest drama series on broadcast TV at the moment) is NBC’s This Is Us, which is produced by 20th Century Fox TV. The best performing new Fox series and the first freshman drama series to get a renewal for next season is Lethal Weapon, from Warner Bros TV.

Yet, both broadcast networks stayed predominantly in-house for their drama pilots this year — Fox ordering no pilots from outside studios and NBC picking up one — as did most of the Big 4 broadcast networks, continuing their push for program ownership. Additionally, the in-season stacking rights issue, which emerged last pilot season, has evolved, with networks demanding expanded stacking rights in what one industry observer called a pivotal moment for the industry.

In-season stacking rights — which allow nets to stream all episodes from a series’ current season on its platforms, not just the standard “rolling five” most recent ones, during the season and for a short period after it — burst into the scene last March, when ABC inked a two-year deal with Warner Bros for full in-season stacking rights to all episodes of new WBTV series. They became a major issue at the time of new series pickups in May, with NBC, along with ABC, particularly aggressive in pursuing in-season stacking rights on all new shows.

This season, in-season stacking rights made an appearance much earlier, at the pilot pickup stage, with networks requiring them to hand out an order, and ABC and NBC again being particularly aggressive. I hear the two networks have been in lockstep, offering $50,000-$100,000 an episode for in-season stacking rights, while CBS has not been offering additional compensation for obtaining in-season stacking rights, instead making license fees all-encompassing, covering both linear and digital distribution.

CBS

What’s more, “the networks are looking for broader streaming rights not only on ad-based platforms but also on ad-free ones,” one source said. CBS, which began to include its new SVOD platform CBS All Access in the in-season stacking rights conversation last May, reportedly has been pushing again for making new series available on the subscription-based platform, which has an ad-free option.

Additionally, ABC, NBC and Fox have been trying to include Hulu, in which all three networks have ownership stakes, as one of the platforms for in-season stacking rights. Meanwhile, for a show to be on Hulu, the streaming service insists it to be also available behind the pay wall. So, as part of the push for stacking rights last May, there are several freshman series whose entire first seasons are available on Hulu’s SVOD service including NBC’s This Is Us, produced by 20th TV.

The hit serialized family drama, which appears tailor-made for binge viewing on a streaming platform and has been getting interest, is one of the first series to test the SVOD off-network market for its library after being exposed to in-season streaming with all episodes from its current season.

NBC

In the past few years, indie studios Warner Bros TV and Sony TV saw their broadcast dramas Gotham on Fox and The Blacklist on NBC fetch some $2 million an episode from Netflix in exclusive SVOD deals. Gotham only has the “rolling five” most recent episodes available on Hulu, and The Blacklist is not on Hulu at all, as streaming services — especially Netflix — have been putting a premium on exclusivity.

Studios selling to unaffiliated networks worry about a show’s potential off-network value after an entire season has been available on the broadcast network’s website and sister streaming service like Hulu or CBS All Access. (For instance, the entire season of CBS’ sophomore comedy Life In Pieces, from 20th TV, and freshman Kevin Can Wait, from Sony TV and CBS TV Studios, are available on CBS All Access.)

And even when stacked episodes are made available online with ads, I hear networks sometimes are playing fast and loose with the term, applying it to running episodes with a couple of network promos inside or even a card or a promo at the top even though the experience may be very close to ad-free because of the minimal interruption.

One observer suggested that the broadcast networks should buy out outright all streaming rights — both in-season and library — as in-season rights could negatively affect the SVOD value of the show’s library.

“I think between agents, creators and other profit participants, they should take a pause — this is a huge pivotal issue,” one observer said.

But nobody expects the networks to pull back on demanding in-season stacking rights because those are being demanded of them by distributors.

Networks had been touting stacking as a promotional tool that would help find and grow audience for new shows, improving their chances of success and their performance on the network. But as linear ratings had been declining overall, translating into fewer ad dollars, the broadcast networks have found a strong new revenue source in retransmission consent fees they have started to collect from MVPDs. However, those cable and satellite providers want something in return — to have full-season access to the network’s shows because that is what their subscribers want.

Because off-network SVOD rights have become so important, the networks’ push for in-season stacking rights, coupled with their demands for program ownership, has made it hard to make deals between broadcast networks and outside studios, and that may have impacted the small number of non-owned drama pilots this year.

I’ve heard of hourlong 2017 scripts from outside studios that did not get picked up to pilot in large part because the companies could not come to business terms. Last year, that happened with the CBS drama pilot from Matt Nix and 20th TV, whose pickup fell through after the network and studios had agreed in principal to a co-production but couldn’t settle on issues related to global distribution and stacking.

I’ve heard that, unlike other broadcast networks, CBS does not just demand ownership of around 50%, it also asks for distribution rights, domestic, including SVOD, or international. That is hard for outside studios to navigate. “SVOD is a worldwide business, it’s hard to split the world up,” one observer said. “It’s hard to sell a series internationally without controlling SVOD; you need to be able to control all.”

This season, there was not a single pitch sale from 20th TV to CBS. It’s not for lack of trying — a number of projects were taken there, but for various reasons, including inability to agree on deal points, nothing was purchased by the network.

“We bought projects from everybody else, we did hear projects from 20th, we didn’t end up making a deal on something,” CBS Entertainment president Glenn Geller told Deadline in January. “It has to be both right for us and the right deal, and we didn’t get there this year.”

Cliff Lipson/CBS

Geller added that “ownership is definitely important to us” but stressed the network has sophomore comedy series Life In Pieces from 20th TV, which just was renewed for a third season.

Also in January, Fox chairman Gary Newman noted the limited options in negotiating with CBS because the network’s sister studio, CBS TV Studios, does not develop for non-affilialed broadcast networks. He pointed to the trading horses template Fox has put in place with ABC where they trade ownership of ABC Studios projects for Fox and 20th TV Projects for ABC. Series that have come out of that model include Fox comedy series Grandfathered and ABC’s Speechless.

There are other explanations for the lack of outside drama pilots this season. Because there are so many top-level drama series creators working in cable and streaming, the studios had their biggest talent focus on developing for their sister networks. On the other hand, with another very slow start to the selling season, marked by a dearth of drama pitches early on, the networks went aggressively after projects from their sister studios, stocking up on dramas with big commitments.

But most importantly, “dramas are very hard to justify buying from an outside supplier,” one industry insider said. “Economics for network dramas are super challenging. They are expensive as license fees have gone up.” The Big 4 networks are shelling out some $2 million an episode in license fees for drama series (the studios cover the rest of the shows’ budget in what is referred to as deficit financing). As dramas’ linear ratings have declined continuously, advertising revenue alone can no longer support them, with repeatability, especially for serializied dramas, also down significantly. Without access to auxiliary revenue that only ownership allows — including international sales, plus SVOD (primarily for serialized drama) and off-network (procedurals, a market that is pretty soft at the moment) — the economics of sustaining a high-end drama series from an outside studio are challenging. “There is a lot of more risk on the network side,” the insider said.

NBC/Fox TV

There are rare exceptions, like NBC/20th TV’s breakout This Is Us, which has delivered big ratings for NBC and has strong off-network prospects for 20th TV, especially in SVOD, while it hasn’t caught on internationally the way it has in the U.S. NBC could’ve tried to buy into the show at the time of the series pickup last May but didn’t. In January, NBC chairman Bob Greenblatt still felt that was a good call.

“I think so,” he said in an interview with Deadline then. “When you look at the investment in the show, it’s very small compared to deficiting, and so I think we both will benefit. I’m really happy we have it, and I’m happy that Fox owns it. Fox has been an incredible partner with us on this show, and we’re very grateful to have it.“

NBC has only one outside drama pilot (Sony TV’s untitled Warren Leight) out of six this year, or 16%. Last year, the ratio was four, including This Is Us, out of seven (57%). Fox did not order a single outside drama pilot this year vs. two out of eight last year, including Lethal Weapon. CBS went down from 25% (2 out of 8) drama pilots produced or co-produced by outside studios last year to 11% (1 out of 9) this year — S.W.A.T., co-produced by Sony TV and CBS TV Studios. ABC went down from 42% (5 out of 12) outside pilots, including co-productions, to 33% (4 out of 11).

Sony TV has four drama pilots it owns or co-owns at ABC, CBS and NBC; Warner Bros TV has two at ABC (in addition to three at sibling the CW); Universal TV has one co-production at CBS; while all of 20th TV’s and ABC Studios’ drama pilots are for their sister networks. (CBS Studios develops exclusively for its affiliated networks CBS and the CW.)

While owning content could be a financial windfall for TV networks’ parent companies, there also is the downside of losing too much money on deficiting shows that don’t work and of missing out on a hit show because it happens to come from an outside studio.

“I am happy to own things that become wild financial successes and happy to license things that fail,” Greenblatt quipped in January. “Of course we know that 80 or 90 percent of all shows fail. So just by definition you want to own less than not. If there is an opportunity for us to get ownership in something that we love and think there would be a big upside, we’d go for that. I’d love to build our studio but not at the expense of the schedule and the overall business. If there are a couple of shows that seem about the same and one is an outside-supplied show and one is an owned show, we’ll probably go with the owned show. And the same if there is an outside supplier that we want to get ownership of a show, there is more flexibility than ever, but I’m less rabid about that than some other people.”